IEA "Oil Market Report" - May 16
Posted: Tue May 16, 2017 10:10 am
Summary of the new report is here: https://www.iea.org/oilmarketreport/omrpublic/
You should all read this carefully.
You should all read this carefully.
Tuder Pickering's comments (David Purcell):
· IEA March Oil Market Report…bottom line – OECD inventories improving, global market undersupplied (WTI $49/bbl) – Mar’17 OECD inventories fell (33mmbbls) vs. +4mmbbls norm and is the largest March draw in the past 10 years. The global oil markets are undersupplied. FY’17 global demand growth was unch at +1.3mmbd y/y even though 1H’17 demand was revised lower by ~150kbpd. FY’17 non-OPEC supply growth revised higher (again) by 100kbpd to +600kbpd y/y. April’17 OPEC production crept up 100kbpd m/m (merely roundoff, in our view) with slight growth in Saudi and Nigeria. Bottom Line – a bullish report which clearly shows the global oil markets are undersupplied.
· IEA March Oil Market Report…implications for the OPEC meeting next week (WTI $49/bbl) – The OPEC cuts implemented in Jan’17 are having the desired impact based on the large March inventory draw (33mmbbls….largest in 10 years). Although OPEC is clearly worried about US tight oil production growth in 2018, we believe that OPEC will extend the current cuts through YE’17 (or longer) as the global inventory overhang is starting to diminish. When OPEC started this price turmoil in Nov’14 they were sending a message to 1) US tight oil, 2) heavy oil, 3) Arctic, and 4) deepwater So far, US tight oil is the only area to show signs of life and we wonder if OPEC believes that 11 counties in W. TX and S.E. NM can supply a 100mmbpd global oil market over the medium/long term. Pursell and Orr will be in Vienna at the OPEC meeting. Look them up if you are there. dpursell@tphco.com